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Schlichter Bogard & Denton Reaches $13 Million Settlement on Behalf of Columbia University Employees in 403(b) Excessive Fee Case

May 21, 2021 GMT

ST. LOUIS--(BUSINESS WIRE)--May 21, 2021--

Schlichter Bogard & Denton, LLP, a leading national law firm based in St. Louis, today filed a preliminary settlement approval motion on behalf of Columbia University (“Columbia”) employees and retirees in their suit against the university involving their 403(b) retirement plan. The plaintiffs in the case, filed in August 2016, sued for alleged breach of fiduciary duty under the Employee Retirement Income Security Act (“ERISA”). The settlement terms include the creation of a $13 million settlement fund for the plaintiffs, as well as substantial non-monetary relief involving changes in the 403(b) plan.

The complaint, Cates, et al. v. Trustees of Columbia University, et al., was filed in the U.S. District Court in the Southern District of New York and was scheduled to be one of the first cases to go to trial in that federal court since the onset of the COVID-19 pandemic.


The case was part of a group of cases filed by Schlichter Bogard & Denton, which were the first 403(b) cases ever filed alleging excessive fees under the Employee Retirement Income Security Act (“ERISA”). The complaint alleged, among other things, that Columbia breached its fiduciary duties by causing plan participants to pay excessive fees for administrative and investment services. Columbia has denied it committed any fiduciary breach in its operation of the plan. After the lawsuit was filed, the Columbia fiduciaries consolidated the plans’ administrative services and capped costs to a flat, per-participant fee, returning excess revenue to the plan participants.

Columbia has agreed, with consent of an independent consultant, to request competitive bids for administrative services again in the next 3-4 years. Columbia has also agreed to maintain the lowest share class of plan investments in annuities and mutual funds, to continue to use an independent consultant to make recommendations, to prohibit the recordkeeper from using confidential information obtained from plan participants to sell other investment and wealth management services, and to ensure all participants are informed of their ability to move assets out of frozen investment options. Schlichter Bogard & Denton will monitor compliance with these terms for a three-year period.

“We are pleased that this settlement, which came on the eve of trial, includes both monetary and non-monetary relief for plan participants, including financial compensation and significant non-monetary improvements to the plan going forward. These key changes will enable Columbia employees and retirees to build their retirement assets for many years to come,” said Jerry Schlichter, founding and managing partner of Schlichter Bogard & Denton, attorneys for the plaintiffs.


Recognized as pioneers in ERISA litigation, Schlichter Bogard & Denton filed the first cases alleging excessive fees in 401(k) and 403(b) plans. In 2009, the firm won the first full trial of a 401(k) excessive fee case against ABB. The firm also handled Tibble v. Edison, the first and only 401(k) excessive fee case to be argued before the United States Supreme Court. In that case, the firm won in 2015 a landmark unanimous 9-0 decision in which both the AARP and the Solicitor General wrote supporting briefs for the plaintiffs.

Federal judges have referred to both Jerry Schlichter and his firm as “preeminent” in the field of 401(k) fee litigation and as not only demonstrating “extraordinary skill and determination,” but also making “a significant, national contribution.” Moreover, federal judges have lauded that Mr. Schlichter and the firm “educated plan administrators, the Department of Labor, [and] the courts” about fees and fiduciary obligations. Finally, federal judges have described Mr. Schlichter as a “private attorney general” who has had a “humongous effect” in causing fees to come down by over $2 billion annually in the entire 401(k) industry.

© Copyright 2021, Schlichter Bogard & Denton, LLP. All rights reserved.

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CONTACT: Jerry Schlichter





SOURCE: Schlichter Bogard & Denton

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PUB: 05/21/2021 06:56 PM/DISC: 05/21/2021 06:57 PM